Kremlin hotline: Hungary colluded with Russia to delist sanctioned oligarchs, companies and banks

While the EU has sanctioned about 2,700 Russian citizens and entities due to their role in enabling Russia to conduct its full-scale war against Ukraine, the bloc must vote every six months on whether to extend the sanctions. Decisions are made by consensus, meaning all 27 member states must agree. This gives Hungary outsized leverage, as it can threaten to block the continuation of the entire sanctions regime if specific people are not delisted.

The same European diplomat, talking to the reporters on the condition of anonymity in order to be able to reveal details of the process, said that Hungary and Slovakia usually start the negotiations with a longer list of Russian names they demand to be delisted. “They don’t use legal arguments, they just say they don’t want those people on the sanctions list for political reasons,” the source explained.

As negotiations progress, Budapest and Bratislava usually whittle their list down to only two or three people, as was the case with Ismailova, Kantor, and Degtyaryov.

Ismailova is one of Usmanov’s two sisters. She has been sanctioned by the UK, United States, Ukraine, and Estonia. Tallinn re-sanctioned her after she was removed from the EU list at Hungary and Slovakia’s orchestration.

Usmanov himself is sanctioned by a host of jurisdictions including the EU, the United States, Canada, and the UK as a result of Russia’s full-scale invasion of Ukraine.

In its Russian Asset Tracker, OCCRP linked the oligarch to more than a dozen luxury properties across Europe, as well as to bank accounts, boats, and aircraft. According to that project, the minimum value of Usmanov’s assets exceeds $3.4 billion.

A representative of Usmanov’s told OCCRP at the time that he had never benefited from the Russian government, nor from the privatization of state holdings. The representative said that Usmanov’s capital was obtained solely through transparent investment and asset management, adding that the ownership of most of Usmanov’s properties had been transferred to his family, and that he could only use them on a rental basis.

Joachim Nikolaus Steinhöfel, the Hamburg-based legal representative for Usmanov and Ismailova, declined to answer questions about the nature of the discussion between Lavrov and Szijjártó about his clients. “Your questions are based on the impermissible assumption that my clients were somehow aware of confidential conversations allegedly held between third parties,” Steinhöfel wrote in an email, adding that “in recent years, many prominent contemporary political leaders have spoken out regarding the need to lift the sanctions against A. Usmanov. This applies even more to the lifting of sanctions against his sister, who was subjected to these measures in an absurd manner solely due to her family ties.”

Steinhöfel also mentioned that over the past four years, Usmanov has won more than twenty court cases against media outlets, public figures, and politicians “who disseminated various false statements about him.”

Since being sanctioned, Usmanov and his two sisters have taken extensive efforts to relieve themselves of the burden, going so far as to file lawsuits against media outlets. His other sister, Saodat Narzieva, managed to get her name off the EU list after just five months.

With Russia, Hungary, and Slovakia having succeeded with Ismailova’s delisting last year, the only remaining sibling is Usmanov himself.

During the latest round of sanctions extension negotiations in March, Slovakia and Hungary continued to press the bloc to have him removed as well.